Republic of the Philippin's Court of Tax Appeals. Quezon City. Saadeddint Momayad -Fares Anis Abdul Karman Krpioir, et al. vs. Comissioner of Customs, et al.

DECISION

= This ts an spreal from s @eeiston of the Comuissioner of Gustons aated Setober 139 1975, in Customs Case No. 948 (MIA 8.15 Nos. 861, B62, 863, 06%, 865, 066 & 867) affirming the decision of the Collector of Gustons, Mantle International 2 ~ Airport, deted Mareh 10, 1969, decreeing the fore fetture of the two hundred thirty four (234) gold bars and seven (7) vesth dn favor af the govern- nent for violation of Seetion 2530(f) of the Yarift and Custons Gofe tn relation to Central. Senk Cir- colar No, 21, and Seetions 2505 ond 2530—m (3) .

end (5) of the same Code.

Siu

Petitioners Seatedtine Mohensd Yares and

© 130

DECISION «

CTA CASE NO, 2190 Anis Abdul Mahman Krei@ie, beth Lebanese netionels and elaiments in Seisurs Identification Nos. S61 ant 862, respectively, together with fans Peter Yatthies Flock ond Berti (Sldegerd Rdery, both ' German nationale end claimants in Selgore idene tifteation Noe. 863 and 86%, respectively, arrived at the Mani te International Airport at sbout 3139 P.M. on October &, 196%, on board @ Scandinavian Atrvoys System (SAS) flight fron Hengok.

Marlene Lobtg Cassau, Yriederick Molther Jean Muller end Meinz Seigfried Lobig, all German nationals ami claimants in Sefsure I¢entification Nets 865, 066 and 667, respectively, arrived at the Manila International Airport at about 4:45 P.M. on October 9, 1968 vie SWISSAIR flight from Tokyo. - «Petitioners £12le4 up their Baggage Declara- - tion and Totry forns before alighting-et the Mantle Internationel Airport by writing the word “touriat" instead of giving a deser! otion of articles they have with them fn the printed space provided for such s listing of the articles, Yeoh | of them had an air ticket coupon tearing con- firmed bookings for Taipeh and from the stamp marks on their oessports mace by the Imeleration ‘ |. $2

DSCISION «

CIA GASE Oe 2190

3 Inspectors at thé MIA sll were admitted o2 transit =» tourists unier Section 5 of Sxecutive Order bo, 408 of June 4, 195%. ‘ «AR appears thet while Petitioners Jaadedine Mohamad Fares ani Anis Abdul Sehmen Kreidie were still in the premises of the Customs ot the AlAs, after they had been cleered by custome dxaminers, - the customs guards suspected from their geit and sovee ments thet they had with then something heavy so the guards sevested them and brought them to the office of the Collector of Customs, hen Ereidie was asked if he had golé bare with hin, he gave « megetive anover, When both vere searched exch was founi to have thirty-five (35) pieces of gold bars, | :

‘Merlone Lobig Sasseu, Preideriec Walther Jonn | Muller and Heine Seigfried Lobig vere eompassoners of Snivedor Mesgardo, Collector of Customs of the — WIA, vho heppened to be in the seme flight, ‘mile on board the plana, Collector Mescurdo happened: to hold Sacsau to prevent her from falling as the plane passed am air pocket, Hasoarde noticat that Cessau fad sometiing hard inside her dress. When he lanied Masesrdo varned Customs personnel to observe some pescenrers for contrabard goods, DECISION « ; S CTA CAST HO, 2190 MS cay | After Muller end Lobig had been cleared by the ' Customs examiner, unmbers of the Custons police brought them to the office of the Collector of Customs, The same wae done to Cassan, who was in the icShy. Asked 1f they had gol¢ bers, Muller and Lobig emswered in the negative. (At first they “refused to be searched bot later changed their minds, The seareh showed that Casson, Muller and Tobig hed 28, 36 and 36 pieces of gold bare, respectively.

Qn Ogtober 9, the day Gasenn, Mallen and lette _ arrived, Fleck and Rdery appeared at the “IA ‘to take a @eparting plane, After the two had beer cleared by the departure Custons exominer, a Customs police accosted and brought then to the office of the Collector of Cnstoms for questions ings Flock dented carrying gold bars with hin und was searchet with Mery. The Customs guard found that Flock and Faery hod 35 and 20 pleees of gold bers, respectively. | “ALL the gold baré in question were found in specially teilored vests concealed inside the clothe: of the petitioners, Tach of the gold bars weighed 1} kilos. — pRCISIon = CTA CASF NO, 2190 5 The gold bars of Fares and Kreidie were seized for violation of Section 2530=m, sub-seetions | 3 and 5, and Seetion 2505 of Republic Act fc. 1937, otherwise known as the Tariff and Customs © Code; those of Floek and “dery were seized for Wiolation of Centre] Henk Cirevler No. 21, es | amended, tn relation to Seetion 253% ana m(3) and (5), and Section 2505 of the Tariff and Cus- tome Codey those of Cassan, Moller ard lobig were seise? under Seetion 2930-f tn relation to Centrel Senk Cireular ‘o. 21, as amended, and See~- tion 2530m(3) and (5), and Section 2505 of the same Code. Subsequently, fection 1108 of the sane Code was included ae another eavee for seteure with respect to the gold bers of fares, Kreidie, Cassau, Meller end Lobig.

Petitioners make capital of the tourists’ exemption from filing Customs declarations and from submitting their bageere for insreetion provided in Nxeovtive Créer fo, ¥08 end Customs Memorandum Cirevlar "os 120-67, "ron @ perusal of the pertinent provisions, however, one will reediiy “note that seid exeaptions are not absolute and, whet is more important, they do not carry with tham a npateative mantle foe etnlations of one 134 PTCISION «.

- OTA CASE NO, 2190 | 6 s Customs lews by tourtetes Seetion att) of "ecutive Order Noe 40R provides thats : @ sag in cases specifically - exeluded by the Geeretary of Foreign Affairs as provided in oe Teo dl a Rp omers anf exeent As reasonable evidence of "ange r of violation of existing re le peomewe s B — fide foreien tourt a6 Sch, shell not be cen ate file a eustoms tLion form ee their shell be exempt from costous nation 4¢ ous examination eaqomt satisfec~ Needless tO say, under the foregoing provision the govermment may require tourists to wake ons toms declarations and to submit their baggage for inspeetion whenever oral examination oroves un- satisfaotory or there is danger “ violation of our @ustons laws. — Costoms “emorandum Cireular fo. 130-67 on the other hand provides thet:

I2I, BUMRAU OF CUSTOMS Ae Tourists arriving by ship « a = «= % Be. Tourists ariving by airplane. Se x x

DECISION =

CTA CASE NO, 2190 ;

2s individual Tourists.

. (a) Indtviauel tourists ehall t th . (b) The beg examination.

a ‘= fe Tf a tourist brings in

Tt

Andy. the wm deninontnis conaerning facilities. for tourists waseh took effect in the Philippines on Vay 9, 1960 provides ag follows: _ article 1 For the purpose of thie Conventions | * . <s.2

(c) The tern tion tay Shei - Pa oe document testifying to the cvarentee sult danse couveneiie be pA Bi ap port the event of failure to Br Bo temporert ly 1 De (te 40 pate, tre the fonesotng provistors thst touriets bringing ir perehandises of personel effects wore then'what they may personally oF ‘Pessormbly Pequire, or of hich value, should ‘ gake eustors declaretions or ut the very lsest inform the Customs puthorities of poasession thereof, this ia clearly infersbie from the fect tint touriste privilege to import: tenporortly froe from import duties ard Import taxes is Limited to person) effects of Mmitet quantity, It is alne infer ble from the tourists’ option te “1) leave the erticles Lo the Airport umier suse 137 ‘DECISION « “OMA CA of 5, 2190 = , tome custody; or 2) tq file a bona for the ex= portation of the arttoles within the reglementary pericdy or 3) to pay duties and texea on the exe cess" in case of articles that are not‘of free | import. Moreover, it ic cleer fron their tenor _ thet the éxemptions froe customs declarstion »nd inepeetion of luggege are ho shields of fimuntty for violators of cur Customs lave. Indeed the exemptions are not meant tc be -an open invites atverted to, aindfel of tin devious ways of.

‘ emugelere, expreasiy provides in ite Avtioles __ dit and 12 as follows: . ' premises;

CTs Cast Bo, 2190 i.’ 9 tte sy tm of impostation lets Aaown in 2 Convention render the > tenvier lieble- “ie te where Petitioners uree thet importation requires 5 tusenbien to unloed; the fact toast Fleek end faery were caught with the bers of gold wher they were - . im the afeport on the day Yotlowing their arrival ami were about to deport, allegedly preves peti-q tioners' Isck of intention to unload thes in the Philippines; hanmee, 1t cannot be said thet. " there ves inportetion of the gold bers.

"(tate seatton 1208 of the Taritt ant Custene Gode importation begins yhen the carrying vexcelk oF siréreft enters 'the Jurisdiction of the Philtr- pines with intention to unlade therein and ends - refers simply to the physieal operation of unlcad- ing (laidlew v. Abretviny 43 Fs 297). thot the tourist intendy to bring back. the article abroad © when he departe te impertinent to the matter.

If such be hi intention, the bringing back 19 Senarate and a1atingt set uncer Customs lnvs,

Put > - = T

. : y(t: est" & THe + ao

DRCISION «

OTA CAST NG, 2190 14 that is, exportation, Thns, [11-5 20) of Cir etiar 130-67 provides that if a touriat brings in new articles very such to exeess of his personal requirenents during the travel he has “to file « bond for the exportation of the article within the reglesentary period," and artiele 1, peragrarh

(e) of the Mel, Converition mentioned further “above provides that “*temporary importation per- mit shall nean the Customs document testifying to the guarantee op ¢eposit of import duties and inm- port taxes chargeable in the event of failore to lave way appear harsh at tines but "Revenue Laws are of « harsher nature than any other and neers= — sarily 90; for, ingenious men render it indise pensable for the legislature to sect their 122cit practices with severer penalties" (laz M. Cigare vs The Comal seioner of Customs, GN, Noy 1621376, August 29) 1966). Petitioners’ concept of importa=— tion not only conflicts with the accepted meaning of the word but siso provides-s convenient avenve of escape for smugglers posing as tourists. The ease of Us. vy Chua Loy, 37 Thils 510 | @kted by petitioners fe not in point beeanse the opium involved therein was in transit from Saigon ~ * 440 pecrstos - tt CTA. CAST BO. 2490 } 2 fo angen ont wie sister watested teen tne veebet nor was there any attempt to unload same, Ubvicous~ ly there was no intention to import the drug into the Philippines ag said therein there being no intention to wnlades In the instant eases the . gold bars were unloaded and passed through Custons surreptit lously.

The geld bars in question are subject to far feiture under Seetion 2530, peragraph a(2) of the - Tarif? and Customs Code because of petitioners! fadlure to declare or sention then te s Custona official ae part of their bagcores Uhéer Customs law, bageage include articles carried by passenzere in their person (21%) Carate Longe Mnerelds ve United States, 15% Feds Rene 039). | | “Petitioners claim thet they have not been | afforded substantive ond procedural due process. When petitioners speak of substantive due process they obviously refer to the interpretetion of Custome decleration ord examination on which aspect of this appeal we have passed upon herein above. The lack of proeedural due process allegedly con- sist in the denial of petitioners" request to 141

USGISION «

CTA CASE 0. 2190 ne 3 compel the appearsnee of tho Commissioner of Vue- toms and the MIA Collector of Customs at the adninistrative hearing, The Court @annot tee hov this supposed irraquinrity affected petitioners’ — right to due process, Petitioners have not shown thst the appearance or testimony of the Connis= sioner and the Cellestor in the administrative hearing could heve changed the result of tho © oppealed decision, The rule ts that mo error or defect in aty ruling or order or in ony- thing done or omitted by the Court or ty the parties ig ground for setting aside or otherwise ataturbing a judgeent unlees substertial justice so require (See, 5, Hule 51, Sules of Court). at any rate, the triel de neve in this Court provided petitioners with adevuete remety for the irregularity complnined of, In effect then Jol- lector Mascaro testified suring the triel in With respect to the preyer of Intervenors for e judgment on their reward, suffice it to re~ peat hereunder what we enld in Philippine fobeeco Vue Curing and etrying Corporotion v, vom, Of Int, dev., STA Ghee Mo, Pres .

» 142 DECISION ~ .

CTA Cash HO. 2190 te , lowing C, Noli Aragon to ae... in s Cases this Court in its resolution of i 1%, 1962 ‘hae made it sufficiently clear that | “his contribution will meinity be mcre ef a rendition of arsistance in the judicial collection of a tax allecedly dues" Ags explained price aa it +. to provide hie with an opportunity to aseist the government in the ecollee- Mian of Saaine. ueeee 22 Bie Ooty, end others similarly situeted t5 ado this Court stated that he has “a le interest 4m the matter in liti en whieh entitles hin to intervene," a.

pete Pte as ‘elnetdated in the from the a Shae be tulti obenes cain of lose by the direct legsl oneration and effect of the in the case at ber.”

it 1s merely an expectancy, for if the sssesement for seles tax 4s finally upheld and ——- in the recovery of will stand to gain at the 25% inf in Rerublae & tee 23 he ean bring hineelf = the seid statute, testes et bom tee — thie Court to y the petitioner or the nt or both ee him the seid smount. Obvious refore, lie with Court of Tax Apneeis,.

| _ for him to establish his eleain . in .eecordanee with the Being yn of Re aet Noe and to pree- ent it to the offielal or officials ma therein for appropriate .a OMe

DECISION «=

CTA CASE HO, 2190 The consolidated sounterelein - and eross-elaim does not some under _ e@ny of the cages enumerated in Sec- tions 7 and 22 of lie e Act Ro.

1125 It 48 not a disputed assessment or a decision of the Comuissioner of Internal Nevenne involving refund of {internal revenve texes, feet or other similar charges, Neither does it involve « matter arising under the Netional Internal Nevenue Code or any law ee gremetegy hf the Bureau of inq@ wahenge to the same kind or glass sates cally men- tioned as ee the exclusive cppgtiate _ ees of the Court re fF is, As the. noo nse mméer peragra of his deanoligated Counterelaim and .Crosg-claim, it is o claim “under the provisions of Seetian 1 of Republic | Aget Nes 2338 wx we” Gince itis . ' fundamental thet a court must have ° te ae re to entertain any counter=- pom gt be et a which a pert ' OP a code po Rule q0, Rulee of Court), it follows that _ the consolidated eountereclain and elaim of the intervenor must have to be dismissed for lack 4 uriscietion | of this Court. More so at a sidered that the Court of Tax is a court of special jurisa- aiction.s as it econ only take . cognizance of matters as clearly within its jurisdiction. ac sNiddas Yorthe court of Tax Appe and the Tags see mr} of Internal 1962) 6 (Resolution, July 6, 1962.) .

affirmed with costs. Intervencrs' elain for WORARFORT, the appealed decision 4s heredy.

BS else RO, 2190 16 rewerd is hereby dismissed since their remedy - does not lie with this Court.

Associate Judge

uw? CORCURs

FO_Qa-the :

ROUN M, a a Presiding Judge .

rane thf nos 145